Every broker dreams of landing the next Facebook or Uber as a client, but with thousands of new startups cropping up every year, do you even know where to find the next potential unicorn company? And, more importantly, do those future unicorns know where to find you?
If you’re a broker looking to corner the startup market, coworking spaces may be the key to finding your next big deal. Using coworking spaces as a prospecting pool can help precocious brokers forge lasting relationships with early-stage clients, which later turn into seriously lucrative partnerships.
But first, it helps to understand what makes coworking so appealing to the estimated 22 million people working from coworking spaces in the US alone.
What’s all the fuss about?
The coworking trend is hotter than ever and doesn’t appear to be going away anytime soon.
And it’s no surprise.
Coworking spaces are hotbeds of innovation and collaboration perfectly suited for the needs of early-stage businesses. Walk into any of WeWork’s 121 locations across the globe and just try not to get bitten by the entrepreneurial bug. The energy and creativity being cultivated in these shared workspaces is infectious, inspiring more and more startups to set up shop.
Chances are, some of your favorite companies got their start in a coworking space. The founders of Instagram, TimeHop and even Uber spent time in a shared office environment before making the switch to a dedicated office space.So, what exactly is it about these shared spaces that make them so irresistible to startups? Coworking spaces offer early stage businesses three key benefits:
- Flexibility. When it comes to office space, flexibility is the name of the game for startups. Early-stage businesses are inherently volatile and founders need to be prepared for any outcome; from rapid growth to acquisition to a complete shutdown. Coworking spaces offer flexible lease terms to suit this startup reality.
- Community. Early-stage founders rely heavily on their networks to source new hires, referrals and opportunities for collaboration. The community-driven atmosphere promoted by most coworking spaces through events, workshops and networking opportunities is a major draw for startups for this exact reason. It’s not uncommon for startups to find and hire contractors or even poach new employees in coworking spaces.
- Perks. On their own, most early-stage startups aren’t able to afford fancy perks like beer kegs, happy hours or discounted gym memberships. But in a shared work environment, resources can be pooled to offer big-time perks to everyone. Coworking spaces like WeWork leverage this approach to provide members with benefits like free flu shots, parties and even discounted access to healthcare.
These benefits are helping the coworking subsector of the CRE market become one of its most successful. Trend forecasting site Small Business Labs is predicting the number of coworking spaces globally to increase from 976,000 to 3.8 million by the year 2020. That’s an increase of almost 300%! And because these spaces are getting larger and larger to accommodate more companies, the number of members per coworking site is expected to increase by 77% in the next four years.
While many companies start out in coworking spaces, few stick with the shared space option forever. Coworking burnout is incredibly common.
The quirky characteristics of coworking that make it appealing at first—fun music on the sound system, constant opportunities for networking, proximity to other like-minded business—turn into major distractions as the excitement wears off and a company matures.
To graduate to the next stage of business, founders will find themselves looking to create a unique company culture and take on a more serious work ethic.
Many coworkers complain that annoyances like spotty wifi, noise and difficulty accessing shared conference rooms start to impede business in a serious way. Not to mention, it’s nearly impossible for a growing business to cultivate a unique culture within the already established culture of a coworking space.
All of these realities inevitably lead most companies to grow out of coworking at some point. If you’ve done the prep work by identifying these prospects and cultivating relationships, this is when they reach for your card.